Riding the Wave: Terri's Insights on the Early Santa Claus Rally and Positive Outlook for Stocks and Bonds in 2023

Terri Spath |

During Thanksgiving week, Terri was interviewed on Bloomberg TV (you can watch part of that here: https://www.bloomberg.com/news/videos/2023-11-23/zuma-wealth-s-spath-on-us-markets-video) where she highlighted the probability that stock AND bond markets may have begun an early “Santa Claus rally.”

Let’s look at the data: looking back historically to 1950, December has been the most consistent positive performer (see the chart). This year, the stock market seems to have some real momentum behind it. More good news: the probability is high that the Federal Reserve Bank may be at the end of its hiking cycle, generally good news for the S&P 500. More tailwinds for investors: rate cuts may start in 2024, the U.S. economy looks to be in solid shape and inflation continues to fall. Turning to less risky assets, Treasury bonds are kicking off a 5% return, a great way to generate modest growth. Put it all together and we are pleased with the outlook for both stocks and bonds for the rest of 2023 and beyond.